[News] Toshiba to Double AI Data Center HDD Capacity by FY2027 With $380M Expansion as AI Storage Demand Surges

AI data centers are driving a new wave of demand for high-capacity storage, prompting Toshiba to significantly expand its HDD production. According to Nikkei, the Japanese technology group plans to double production capacity for hard disk drives used in AI data centers within fiscal 2027. Toshiba will invest roughly JPY 60 billion (US$380 million) to expand its facilities in the Philippines.

The expansion marks Toshiba’s first major HDD investment in around five years. In addition to adding production lines at its Philippine plant, the company will begin handling new products that increase storage capacity per drive by as much as 40%, the report notes. Looking further ahead, Toshiba plans to work toward mass production of 65TB-class HDDs in 2030, followed eventually by 100TB-class models.

Alongside the capacity expansion, Toshiba plans to automate more inspection processes and cleanroom operations at the Philippine plant. The move is expected to reduce the additional workforce normally required for the expansion by about 40% while improving yield rates, the report adds.

Toshiba is one of the world’s three major HDD suppliers, alongside U.S.-based Western Digital and Seagate Technology. While Toshiba currently holds just over 10% of the market by storage capacity, it aims to increase that share to 30% over the medium term, according to Nikkei.

AI Boom Tightens the HDD Market

Toshiba’s expansion comes as AI infrastructure drives broader demand for high-capacity HDDs. As Nikkei notes, solid-state drives (SSDs), which use memory chips, offer faster read and write speeds than HDDs but cost around 20 times more. The ongoing memory supply crunch is further driving demand for HDDs, particularly nearline models, a high-capacity tier that bridges faster online storage and slower offline storage. Demand for nearline HDDs is expanding rapidly with the AI boom, and the shortage is expected to persist for the time being.

More recent signs suggest the tightness is extending well beyond 2026. According to TechNews, Seagate says the vast majority of its nearline HDD capacity is already allocated through 2028, with some customers planning demand into 2029 and beyond. Western Digital has also committed most of its 2027 supply under long-term agreements, with portions of 2028 and 2029 capacity already covered.

Western Digital is also stepping up investment in next-generation HDD technology. According to Nikkei, the company plans to invest about US$1 billion in Japan over five years through 2030, with funding directed toward developing advanced technologies and production techniques, talent acquisition, and collaboration with research institutions and universities.

Meanwhile, major Japanese suppliers of precision HDD components also stand to benefit from Toshiba’s increased production, with some already expanding capacity to meet growing demand. MoneyDJ, citing Nikkei, reports that Nitto Denko plans to invest JPY 28 billion to expand production of CISFLEX components used in HDD magnetic-head suspensions, targeting a 40% capacity increase by the end of fiscal 2028 compared with fiscal 2025. The company holds more than 90% of the global market for the component.

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(Photo credit: Toshiba)